Japan’s licence renewal procedure raises concerns
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Ed Bowers, the CEO of MGM Japan expressed his conern about the licence renewal procedure, saying: “could turn out to be too expensive for potential investors.”
Japan’s casino industry is finally on the brink of getting its regulatory framework, as the countries legislators are about to pass the IR (Integrated Resorts) Implementation Bill, before the Diet’s upcoming holiday. However, there have been some concerns raised about how licence renewals have been planned and how expensive to fund they could turn out to be. Winning operators will score a concession with a ten-year lapse to develop their projects and a three-year casino licence. But when the concession expires, this is gonna need a reapproval every five years, and this gonna cost money thus making the procedure unappealing for potential investors.
“The banks will look at this as a five-year licence and as it’s a shorter timeframe, the cost of funds will be higher and therefore investment levels potentially lower,” Ed Bowers, CEO of MGM Japan said at the Japan Gaming Congress in Tokyo. “Getting private business to invest [€7.65 billion] in a project with a contract that needs to be renewed every five years and have a local assembly approval is complicated and risky,” he added.
Japans casino industry needs the approval of the IR Implementation Bill if they want to lay out the necessary legislative foundation. However, even as the ruling coalition continues to push to get it passed before the Diet session ends on June 20th, lawmakers are divided on several details and its possibilities remain uncertain.
Source: European Gaming News